Posted on 11/28/2007 7:29:13 PM PST by Tai_Chung
For decades, nothing stood in the way of better relations between China and the European Union (EU).
Unlike the Americans, the Europeans emphasized cooperation. And, unlike Washington politicians, the bureaucrats in Brussels regarded China as a huge economic opportunity, rather than a security challenge.
But, as the EU and China sit down today for their 10th bilateral annual summit in Beijing, the mood cannot be more different: A raft of trade and political issues has soured the relationship.
And, despite all the diplomatic efforts, nobody knows how the old partnership can be revived.
Mr Peter Mandelson, the EU's Trade Commissioner, set the new confrontational tone even before the summit began.
In a speech delivered in Beijing on Monday, he accused the Chinese authorities of failing to tackle a 'tidal wave' of counterfeit goods, claiming that no fewer than eight out of every 10 fake products seized in Europe originated from China.
He also alleged that China was turning a blind eye to the 'theft' of European companies' technology and patents.
'I cannot ignore this situation...It's hard to see how much longer our patience will last if this treatment does not improve,' Mr Mandelson warned.
The Chinese reacted furiously. Vice-Premier Wu Yi announced that she was 'extremely unhappy' with Mr Mandelson's speech, while other Beijing officials accused the EU trade boss of 'inventing false problems'.
When the two sides sit down to their talks this morning, they are likely to encounter even bigger differences.
Trade volumes between the EU and China have grown from S$111 billion a decade ago to almost S$500 billion today. Cultural and tourist links are also developing fast.
However, the trade gap in China's favour seems to be uncontrollable. The EU ran up a trade deficit of S$270 billion with China last year; this is likely to balloon to more than S$360 billion by the end of next month.
'During the six days that I spend in China,' said Mr Mandelson, referring to his current Beijing trip, 'the trade deficit will grow by over 2 billion euros, or 15 million euros an hour. That is what I call unsustainable.'
Two billion euros is equivalent to S$4.3 billion.
To make matters worse, China's currency, which Beijing had allowed to rise against the US dollar, has actually gone down against the euro, resulting in a flood of cheap Chinese products.
The Europeans suspect that, in effect, China is subsidising its trade concessions to the United States by grabbing a bigger share of European markets.
China has tried to answer these complaints. Earlier this week, Beijing invited Europe's top central bankers to discussions on currency management.
And the mega-deals which French President Nicolas Sarkozy signed on Monday for European civilian aircraft and nuclear power plants are touted as another effort to redress trade imbalances.
With some justification, Chinese officials also point out that the trade is dominated by European multinationals which outsource their manufacturing to China, only to re-export the products back into Europe.
So, a sizeable amount of the trade deficit ends up in the coffers of European companies, whose profitability has, indeed, increased.
But the cooling-off in relations between Beijing and Brussels is not only due to trade; just as important is the internal transformation of the EU itself since the former communist countries of Eastern Europe joined its ranks.
For many of the new EU members, political and human rights considerations rank high; all of them view China as a communist state which should not be pandered to.
Meanwhile, some of China's best Western European friends have disappeared.
The new German Chancellor recently set a precedent in defying an old political taboo by openly receiving the Dalai Lama, the exiled Tibetan leader.
The French President is also far more sceptical of China, as is British Prime Minister Gordon Brown. The days when China was regarded as just a juicy market are gone, probably for good.
For the moment, Beijing has responded in the only way it knows: by applying a divide-and-rule strategy which ostracises Germany for the Dalai Lama visit, while rewarding France with new business.
However, this tactic, so effective in the past, is no longer working.
Opinion polls indicate that positive public perceptions of China are nosediving throughout Europe, while protectionist demands are increasing.
As Mr Mandelson frequently warns, there is a anti-Chinese groundswell in Europe to which Beijing should pay heed.
In many respects, therefore, today's summit is fairly irrelevant.
If China wants to address the real problems, it must engage with the people of Europe, by building up its political lobbying efforts with a broader range of politicians and businessmen, beyond the top EU leaders who are attending today's discussions.
However, almost anything Beijing proposes to do would not revive the same old, innocent love affair between China and the EU. It is truly over.
Interesting. It certainly puts the huge trade deficit that the U.S. has with China in a new perspective. I had no idea things had gone this far.
Barely.
Seems like a good deal to me as a US consumer. I get cool new electronics and stuff and give Chinese companies pieces of paper worth less everyday. And the ChiCom government then loads up on low interest government bonds that pay less everyday.
If they ever decide to call in their debt... HA! We'll run off a fresh batch of bills and put them in a container!
Besides tax cuts, the low dollar is the best thing this administration has done economically!
(Just don't buy the brightly colored toys. Or the fish.)
This article is BS. While EU moans and cries, Sarkozy is in China dining and toasting with the Chinese. It’s all a show. The EU does the official bitching, while the individual countries of the EU make independent deals with China. Just proves how impotent the EU is as an organization.
“Unlike the Americans, the Europeans emphasized cooperation. And, unlike Washington politicians, the bureaucrats in Brussels regarded China as a huge economic opportunity, rather than a security challenge.”
What Americans and what Washington pols is this guys writing about?
Even as members try to make their best deals with China, more broadly perhaps the EU is waking up to China’s growth being mainly at European expense.
Analysis: French study says Europe fading
By Martin Walker
UPI Chief International Correspondent
Published 5/14/2003
WASHINGTON, May 14 (UPI) — Europe is predicted to become a second-ranking economic force over the next 50 years, its share of world output almost halving from its current 22-percent share to 12 percent, a top French think tank reported Wednesday.
Over the same period, the United States is expected almost to retain its 25-percent share, which will by 2050 be matched or even outpaced by China as the world’s dominant economy.
“The enlargement of the European Union will not be sufficient to guarantee parity with the United States,” says the report from the prestigious French Institute of International Relations. “The EU will weigh less heavily on the process of globalization and a slow but inexorable movement onto history’s ‘exit ramp’ can be foreseen.”
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